Back in 1998, Mississippi trial lawyer Dickie Scruggs spoke of “home cookin’ ” when describing his role in forcing four tobacco giants into a record $246 billion settlement with 46 states. It certainly left him eating high on the hog, earning nearly $1 billion in fees. The case made him one of America’s richest lawyers, with a cash flow many Wall Street firms would envy. Every three months since the late 1990s, Scruggs’ firm has received more than $10 million from the tobacco litigation payout. The case will fatten his bottom line by $42 million every 12 months for 23 years. He filed his first tobacco case in his hometown of Pascagoula. Traction gained in that friendly venue helped topple Big Tobacco state by state, like a long line of cigarette packs stacked as dominoes. “We knew it would be a public relations war and a political war every bit as much as a legal fight,” Scruggs told a reporter a decade ago, explaining the “insular advantage” of bringing tobacco companies to answer in Mississippi.

Fast-forward to late February, when Scruggs sat mute in a federal courtroom up in Oxford—in the dock on federal charges of bribing a state judge last year. If convicted, he faces up to 75 years in prison.

Scruggs, now 61, has for years been a white knight in the eyes of many, especially in Mississippi. As a plaintiffs lawyer, he almost always went after unpopular defendants: makers of asbestos, insurance companies, drug manufacturers and the like. And Scruggs has continued to do so, even though the tobacco payout assured that he would never have to work another day in his life.

A year after the massive tobacco settlement, he bankrolled a series of class actions concerning use of the drug Ritalin as treatment for hyperactive children—though he missed the mark on that crusade, with the cases being quickly dismissed. He went after HMOs, but that effort resulted in settlements of a mere $250,000. He took on the welding industry for harm caused to welders by fumes, and he worked for free to challenge alleged hospital overbilling of the uninsured. And after Hurricane Katrina in 2005, he declared war on insurance companies that had refused claims from Mississippians whose homes and businesses had been damaged or destroyed.

Author John Grisham, a former Mississippi lawyer and longtime friend of Scruggs’, is said to have loosely based his novel The King of Torts on Scruggs.
Key associates have pleaded guilty or turned witness against him in the bribery trial, and long-festering feuds over the massive fees Scruggs earned have fueled new questions about the very manner in which he built his career.

Before making a fortune in tobacco, Scruggs made his professional reputation—as well as his first massive paycheck—in asbestos litigation, mainly for workers in Pascagoula’s shipyards. In the early 1980s, while others were taking only those clients who had exhibited symptoms, Scruggs was the first lawyer to pay for X-rays and asbestosis screenings for potential clients. It paid off big for Scruggs and his partners, to the tune of $50 million. A

nd Scruggs decided to use that money to seed a series of highly speculative cases against the tobacco giants. But it was how he used that money that laid the foundation for some of the accusations he now faces. In 1989, Merrell Williams was a $9-an-hour paralegal for a Kentucky law firm representing a tobacco company. He left the firm and became a whistle-blower, turning over to Scruggs a crucial set of internal tobacco company documents showing that cigarette makers had known the addictive properties of nicotine—something they had long denied. The tobacco companies were outraged. They sued Williams, claiming that the paralegal had stolen the documents and sold them to Scruggs—a charge Scruggs denies. But Williams certainly profited from the move. In a deposition in the case, unsealed in 1996, Williams testified that Scruggs and his partners had co-signed loans for his two cars, purchased a $109,000 home for him in Pascagoula, and paid him a salary of $3,000 per month.

Yesterday I began what I thought would be a two-part series on compliance training.However, or perhaps more accurately, as usual, I got carried away so I am now off on a multi-part series on how to design, implement and assess an effective compliance and ethics training program. This series was inspired by an article in Slate, entitled “Ethics Trainings Are Even Dumber Than You Think”, by L.V. Anderson. Her article was generally dismissive of compliance and ethics training, panning it as a mere ‘check-the-box’ exercise so corporations could use it as a CYA defense if any government regulators ever came looking. In spite of her dismissive attitude, she did have some useful nuggets that you should incorporate into your Foreign Corrupt Practices Act (FCPA) compliance program.

In a recent Slate article, entitled “Ethics Trainings Are Even Dumber Than You Think”, author L.V. Anderson railed against what she termed box-checking training where companies put on training not to actually train employees but simply to check the box that training has occurred. She also spoke against “dumbed-down nature of most compliance courses”.